Commodities have enjoyed a great first half in 2021 as rising demand from a reopening economy combined with curtailed supply due to pandemic-related bottlenecks to create some of the best pricing conditions in decades. These conditions likely will take time to correct, which is good news for Vale, the Brazilian miner. Vale happens to be one of the world’s largest producers of iron ore and is also a major producer of other industrial metals and precious metals.
Like most miners, Vale had a rough run in the years leading up to 2020. The shares were in free fall off and on for most of the past decade.
It’s not that Vale did anything particularly wrong. Vale as both a resource stock and an emerging market stock, never stood a chance.
Conditions finally improved in 2020. Emerging markets and commodities both finally bottomed out. Vale stock has more than tripled since hitting lows in March 2020, and more gains could be on the way.
Mining stocks can be wildly volatile, of course. But with industry conditions positive for the first time in years, Vale could be one of the best stocks to buy for the rest of 2021 and even farther out.
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